Oral Gift Under Mohammedan Law Reduced In Writing On Unregistered Document Cannot Be Subjected To S.47A Of Indian Stamp Act: Allahabad HC

The Allahabad High Court has held that oral gift under the Mohammedan Law which is reduced in writing on an unregistered document cannot be subjected to proceedings under Section 47-A of the Indian Stamp Act.

Section 47-A of the Indian Stamp Act empowers the Collector to initiate proceedings for deficiency in stamp duty on any instrument under the Act. Sub-section (1) of Section 47-A provides that where in any instrument presented for registration under the Registration Act, 1908, it is found that the market value mentioned is less than the value determined under the Stamp Act, such document shall be referred to the Collector. Thereafter, the Collector proceeds to determine the deficiency in stamp duty and penalty to be paid by the party as per the conditions set in Section 47-A.

“Once this fact is admitted by respondents that gift deed/hiba was not presented for registration, then proceedings under Section 47(A) of Indian Stamp Act cannot be pressed to service.Further, Section 47-A of the Act can only be applicable when any instrument/document is presented for registration and not otherwise. If the auhorities were of the view that hiba/git deed was required for payment of stamp duty, then the proceedings u/S 33 of the Stamp Act should have been initiated and not u/s 47-A of the Act,” held Justice Piyush Agrawal.

It is the petitioners' case that one Ale Hasan made an oral gift of the land in question in favour of the Sarvari Educational Society on 22.12.2005. Subsequently, possession of the land was handed over to the society. Thereafter, Mohd. Aslam, acting as Manager of the Sarvari Educational Society made an oral gift in favour of Sahas Degree College, which stood accepted through its Secretary namely Nadeem Hasan S/o Ale Hasan on 06.02.2006. All the gifts were oral as per the Muslim Personal Law.

Proceedings were initiated under Section 47-A of the Stamp Act based on an ex-parte report. Subsequently, order was also passed where Rs.11,25,000/- was shown as deficient stamp duty and a penalty of the same amount was also imposed. An appeal against the order was rejected.

Counsel for petitioners argued that the gifts were noted in the written memorandum only for “yaddast” and was not required to be registered, therefore, no stamp duty was payable on them.

Reliance was placed on Hafeeza Bibi & Ors. Vs. Shaikh Farid (Dead) by LRs. & Ors., where the Supreme Court held that the three essentials of a gift under Mohammadan Law were the declaration of gift, acceptance and delivery of possession and if an oral gift is made which fulfils all three conditions, then it is a complete and irrevocable gift. It was held that reducing such oral gift in writing does not make it a formal gift deed.

“Section 129 of T.P. Act preserves the rule of Mohammadan Law and excludes the applicability of Section 123 of T.P. Act to a gift of an immovable property by a Mohammadan. We find ourselves in express agreement with the statement of law reproduced above from Mulla, Principles of Mahomedan Law (19th Edition), page 120. In other words, it is not the requirement that in all cases where the gift deed is contemporaneous to the making of the gift then such deed must be registered under Section 17 of the Registration Act. Each case would depend on its own facts,” held the Apex Court.

Justice Agrawal held that neither party claimed that the hiba/ gift deed was presented for registration, therefore, proceedings under Section 47-A of the Stamp Act could not be initiated against the petitioners as it was an unregistered document.

Accordingly, the writ petition was allowed.

Case Title: Sahas Degree College Thru Secretary Nadeem Hasan v. State Of U.P. Thru District Magistrate J.P. Nagar And Others 2024 LiveLaw (AB) 506 [WRIT - C No. - 41137 of 2010]

Case citation: 2024 LiveLaw (AB) 506

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